Solid Labor Market 

The major economic data released this week was a little stronger than expected overall. In particular, the labor market continued to perform well despite investor concerns. As a result, mortgage rates ended the week slightly higher.  

Like the June Employment data, the latest JOLTS (job openings and labor turnover rates) report, covering the month of May, suggested unexpected strength in the labor market. At the end of May, there were 7.6 million job openings, well above the consensus forecast of 7.3 million and the most since November 2024. The ratio was about 1.1 openings for each available worker, down from a peak of over 2.0 in early 2022, and in line with the levels seen prior to the pandemic. A larger number of openings suggests that companies face more pressure to raise wages to hire enough workers.

Two other significant economic reports released this week by the Institute of Supply Management also were a bit stronger than expected. The ISM national services sector index rose to 50.8, and the national manufacturing index increased to 49.0. Readings above 50 indicate an expansion in the sectors and below 50 a contraction. Service companies continue to outperform manufacturers, but higher tariffs on foreign goods may help narrow the gap over time.

Investors will continue to look for additional information about tariff policies and monitor the situation in the Middle East. It will be an extremely light week for economic reports. The detailed minutes from the June 18 Fed meeting will come out on Wednesday. Jobless Claims will be released on Thursday. Mortgage markets will be closed on July Fourth.